FAQFAQ   SearchSearch   MemberlistMemberlist  Chat Chat  UsergroupsUsergroups  CalendarCalendar RegisterRegister   ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

Bankers should be on the dole without our bailouts & QE

 
Post new topic   Reply to topic    9/11, 7/7, Covid-1984 & the War on Freedom Forum Index -> Banksters' Pre-Planned Economic Warfare - Global Financial Conspiracy
View previous topic :: View next topic  
Author Message
TonyGosling
Editor
Editor


Joined: 25 Jul 2005
Posts: 18335
Location: St. Pauls, Bristol, England

PostPosted: Tue Feb 26, 2013 12:47 am    Post subject: Bankers should be on the dole without our bailouts & QE Reply with quote

Welfare for corporate criminals while real people starve

Why Should Taxpayers Give Big Banks $83 Billion a Year?
By the Editors Feb 20, 2013 11:30 PM GMT+0000
http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big -banks-83-billion-a-year-.html

On television, in interviews and in meetings with investors, executives of the biggest U.S. banks -- notably JPMorgan Chase & Co. Chief Executive Jamie Dimon -- make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.

So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
Enlarge image


Granted, it’s a hard concept to swallow. It’s also crucial to understanding why the big banks present such a threat to the global economy.

Let’s start with a bit of background. Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail.

Lately, economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. In one relatively thorough effort, two researchers -- Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz -- put the number at about 0.8 percentage point. The discount applies to all their liabilities, including bonds and customer deposits.
Big Difference

Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.

The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. - - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.

Neither bank executives nor shareholders have much incentive to change the situation. On the contrary, the financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy. The result is a bloated financial sector and recurring credit gluts. Left unchecked, the superbanks could ultimately require bailouts that exceed the government’s resources. Picture a meltdown in which the Treasury is helpless to step in as it did in 2008 and 2009.

Regulators can change the game by paring down the subsidy. One option is to make banks fund their activities with more equity from shareholders, a measure that would make them less likely to need bailouts (we recommend $1 of equity for each $5 of assets, far more than the 1-to-33 ratio that new global rules require). Another idea is to shock creditors out of complacency by making some of them take losses when banks run into trouble. A third is to prevent banks from using the subsidy to finance speculative trading, the aim of the Volcker rule in the U.S. and financial ring-fencing in the U.K.

Once shareholders fully recognized how poorly the biggest banks perform without government support, they would be motivated to demand better. This could entail anything from cutting pay packages to breaking down financial juggernauts into more manageable units. The market discipline might not please executives, but it would certainly be an improvement over paying banks to put us in danger.

_________________
www.lawyerscommitteefor9-11inquiry.org
www.rethink911.org
www.patriotsquestion911.com
www.actorsandartistsfor911truth.org
www.mediafor911truth.org
www.pilotsfor911truth.org
www.mp911truth.org
www.ae911truth.org
www.rl911truth.org
www.stj911.org
www.v911t.org
www.thisweek.org.uk
www.abolishwar.org.uk
www.elementary.org.uk
www.radio4all.net/index.php/contributor/2149
http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
https://37.220.108.147/members/www.bilderberg.org/phpBB2/
Back to top
View user's profile Send private message Visit poster's website MSN Messenger
fish5133
Site Admin
Site Admin


Joined: 13 Sep 2006
Posts: 2568
Location: One breath from Glory

PostPosted: Sat Mar 30, 2013 8:41 pm    Post subject: Reply with quote

Godfrey Bloom UKIP MEP does a Nigel Farage finishing with "you scoundrels" in a repost to Spains MEP Goebbels.


http://sorisomail.com/email/238743/o-politico-que-representa-realmente -a-populacao.html

_________________
JO911B.
"for we wrestle not against flesh and blood but against principalities, against powers, against rulers of the darkness of this world, against wicked spirits in high places " Eph.6 v 12
Back to top
View user's profile Send private message Send e-mail
Display posts from previous:   
Post new topic   Reply to topic    9/11, 7/7, Covid-1984 & the War on Freedom Forum Index -> Banksters' Pre-Planned Economic Warfare - Global Financial Conspiracy All times are GMT
Page 1 of 1

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
You cannot attach files in this forum
You can download files in this forum


Powered by phpBB © 2001, 2005 phpBB Group